Gold spiked to $1387 and silver to $24.90 yesterday, on low volume. So far in this bull move, corrections have been quick and shallow. It’s not a rule written in stone, but a big prologued move up that has been seriously overbought is due for a big correction, at some point.

But markets can keep heading up and remain overbought for months, or much longer than common sense would dictate. So it simply doesn’t make sense to guess that a turn is happening, until it is absolutely confirmed. Nevertheless, I wouldn’t be surprised if we just saw a local top.

Given the relentless strength in gold and silver and the pathetic weakness of the dollar, it seems likely that a low in a coming correction wouldn’t drop that far. Here are some rough guesses for gold: $1250, somewhere between $1200 and $1250, and $1100 in worst case. I would put the most weight on $1200-1250, like say $1230.

Let’s see if equities turn around and the dollar reverses. The dollar is showing some signs today that it may have bottomed, finally. Yesterday it got almost to 76, and fell to 80.8 against the Yen. It’s a pretty sick puppy, but that’s exactly what markets want you to think before they turn around.